Office space study: To cowork or not to cowork?

What should small to midsized enterprises (SMEs) consider when choosing between a coworking space or a private office? We find out what Australian employees think about each, and how organisations can adapt these workplaces to meet their employees’ needs. 

As companies navigate the demands of modern workforces, accessing workplace options and choosing the most appropriate solution can facilitate employees’ return back to the office. Additionally, it can increase employee collaboration and foster a more engaging company culture. In this article, we evaluate the advantages and disadvantages of shared or coworking spaces and private offices, according to employee respondents.

GetApp’s study on remote work found that 65% of remote and hybrid employees would only apply for a non-remote job if it is hybrid. This clearly shows that there is no sign of slowing down when it comes to this working model. Additionally, the same study found that in-person connections attract about half (51%) of surveyed employees to the office, and a third (33%) said working three days a week in the office would be ideal. What is the role of a physical workplace in the era of remote and hybrid work, and how should companies adapt their physical workplaces to meet the needs of employees? Space management and equipment management are among the most common features of facility management software which can help organisations effectively manage workplaces. 

We surveyed 1,018 employees, of which 636 work in a private office and 382 work in a coworking space. For this study, a coworking space is defined as an environment designed to accommodate people from different companies (or freelancers) by sharing the workspace. It includes sharing facilities, equipment and services. 

On the other hand, a private office refers to a traditional office space entirely for a single company, consisting of a whole building or building floor. In this article, we will refer to those respondents who work out of coworking spaces as ‘coworking respondents’ and those working out of private spaces as ‘private office respondents’. The full methodology can be seen at the end of the article. 

Flexibility prompts companies to opt for coworking spaces, not a transition from remote work

Economic uncertainty has been fuelling decisions in recent years and is forecast to remain subdued over the next two years. Companies in the market for a new workplace will likely keep economic uncertainty that can affect business growth at the top of their minds when deciding between a private office and a coworking space. 

During times of uncertainty, coworking spaces —also known as flexible workspaces— can provide companies with more flexibility. They typically offer shorter lease agreements and size ranges, which can accommodate a growing number of employees or even be helpful in times of downsizing. As a result, a third (33%) of coworking respondents said increased flexibility is why their company opted for a coworking space. The same group of respondents also cited some other reasons why their company has decided on a coworking space:

• Cost reduction (31%)
• Access to shared amenities (29%)
• Networking opportunities (24%)

Contrary to popular belief that return-to-work policies are fuelling interest in coworking spaces, only 14% of coworking respondents said their company has opted for a coworking space because of a transition from remote work to a physical space. 

Additionally, nearly half (49%) of coworking respondents said their company has been operating from its current coworking space for more than four years. This data may suggest that most companies did not transition to coworking spaces due to the pandemic but instead opted for a coworking space in the pre-remote and hybrid work era. 

Coworking spaces boast a collaborative atmosphere, but they are distracting

While companies may be opting for coworking spaces mainly for increased flexibility and cost reduction purposes, there may be additional benefits that support coworking employees. Similarly, there may also be some disadvantages that companies should consider when selecting this type of workplace. The following infographic displays the most cited pros and cons according to coworking respondents.

Coworking spaces cultivate collaboration by creating open and inviting spaces that encourage knowledge-sharing in a diverse community. These interactions and exchanges of ideas can enable a rich environment for innovation. As a result, 43% of coworking respondents cited a collaborative atmosphere and networking opportunities as the main advantages of working in a coworking. 

Location is also a significant factor, where 35% of coworking respondents said they like the convenience of where coworking spaces are situated. While many coworking spaces have historically positioned themselves in central locations, there is also a movement in Australia that is positioning coworking spaces in city fringes to reduce employee commute time. In the same above-mentioned GetApp study on remote and hybrid work, respondents cited no commute as one of the primary benefits since employees have been working remotely. 

On the flip side, open and inviting spaces come with their downsides. Nearly half (48%) cited noise and distractions in coworking spaces as the most prominent disadvantage. While there is no one-fit solution for all employees, companies that have employees focused on less collaborative work should consider this when choosing a workplace.  

Additionally, an open-plan layout that fosters collaboration has an impact on privacy. Employees need to be extra vigilant in this environment to keep confidential information at bay from prying eyes or eavesdropping. Notably, 38% of coworking respondents expressed concerns over limited privacy and confidentiality. 

61% of coworking employees prefer to work from a private office 

Despite the advantages of coworking spaces, more than 6 out of 10 coworking respondents would prefer to work exclusively from a private office dedicated to their company rather than a coworking space. Private offices may have a sense of prestige, but what exactly do employees like about them? The following infographic displays the most cited reasons that private office respondents like and dislike about them.

The word ‘routine’ may be commonly associated with words such as uninteresting or mundane. However, in the workplace, routine can establish many benefits, such as creating consistent results and reducing stress. Private offices can often provide employees with a structured, familiar environment conducive to creating routines. This is borne out by our survey, as just over half (52%) of private office respondents said they value a consistent working routine the most while working in a private office.

Additionally, a controlled, quiet environment can facilitate employee productivity. Four out of 10 (40%) private office respondents said they benefit from enhanced privacy and reduced distractions. However, private office layouts that simulate a quiet and controlled environment may reduce employee collaboration. Moreover, from our survey, 23% of private office respondents said that the limited exposure to different work styles was a disadvantage. 

Notably, 87% of private office respondents have always worked in a private office, whereas 36% of coworking respondents said their company moved from a private office to a coworking. This data may suggest that some private office respondents have yet to discover the benefits of a coworking space and that some companies have decided to make the switch.

Make a physical workplace work for your business

A physical workplace —either a coworking space or a private office— provides employees with sought-after in-person connections. Whether your goal is to attract remote employees to the office, facilitate collaboration, or foster a more participatory company culture, there are solutions to promote each goal and adapt them to employee needs in each type of workplace. 

When choosing between a coworking space and a private office, organisations should also factor employee satisfaction into their decision-making process. Businesses should collect employee feedback to get a sense of how happy they are in their place of work and what could be improved. From our survey, more private office respondents (34%) said they are very satisfied working from their workplace compared to coworking respondents (16%). 

In summary of the data presented in this article, organisations should bear in mind the following when choosing a workspace:

• Consider flexibility and cost reduction: first and foremost, a physical workplace must align with your business needs and restrictions
• Choosing coworking spaces: these workplaces foster collaboration, but privacy and confidentiality solutions are needed
• Choosing private offices: these workplaces offer enhanced privacy and reduced distractions but lack opportunities for more exposure to different work styles
• Facilitate employee satisfaction: There are opportunities to make all sorts of workplaces better suited for your employees, which can help boost employee satisfaction